What Are the Best REITs to Buy and Hold? Let’s Dive In and Discover the Top Picks!
Jan 31, 2025
Financial markets are volatile; panic can transform sound research into hasty decisions. When market sentiment sours, selling in a frenzy can erode value. Yet, history shows that crises offer unique buying opportunities—especially in REITs known for stable dividends and long-term appreciation.
Key Lessons from Market Crises
- 1929 & The Great Depression: Widespread panic triggered a decade-long bear market as an overreaction to early signs of trouble.
- 2008 Financial Crisis: Massive selling amid mortgage defaults allowed patient investors like Warren Buffett to buy quality assets at bargain prices.
- 2020 Pandemic Crash: Despite rapid declines driven by fear, sectors like technology rebounded quickly, proving that well-timed investments can yield significant returns.
Contrarian Investing: Turning Panic into Profit
- Mindset: When fear grips the market, consider it a signal to find undervalued assets rather than join the sell-off.
- Strategy: Look for REITs in diverse retail, industrial, and residential sectors that suffer from temporary sentiment rather than fundamental flaws.
- Historical Wisdom: Legendary investors have often bought when others sold, exploiting market overreactions to secure long-term gains.
Advanced Strategies: Options for Volatility
- Selling Put Options: During high volatility, elevated premiums allow you to earn income while committing to purchase quality REITs at lower prices.
- Using LEAPS: Long-term call options can leverage potential recoveries, offsetting costs with premiums collected during downturns.
Note: Strict analysis and disciplined risk management are essential when using options to avoid magnified losses.
Fear can be a powerful ally. Recognize that panic often signals market overreaction rather than genuine decline. By maintaining a contrarian outlook, leveraging historical insights, and employing advanced strategies like options, you can strategically position your portfolio—especially through resilient REIT investments—to weather market storms and capitalize on recovery cycles.
Best REITs to Buy and Hold: Identifying Value in Uncertain Times
Below is an overview of several REITs that many investors consider attractive for diversified real estate exposure. Since you operate a business in Indonesia, you might also want to assess your overall portfolio’s geographic balance. While the following examples come mostly from the U.S. market—as highlighted in several recent articles—they offer a solid starting point for understanding why certain REITs are popular with investors.
1. Realty Income (Ticker: O)
- Why? Often nicknamed “The Monthly Dividend Company,” Realty Income is renowned for its long history of paying reliable monthly dividends. Investors appreciate its focus on retail properties under long-term leases, which can offer stable cash flow even in turbulent markets.
2. Prologis (Ticker: PLD)
- Why? As one of the largest industrial REITs, Prologis specializes in logistics real estate, which is increasingly in demand with the growth of e-commerce. Its global footprint and diversification in distribution centres make it a favoured option for investors looking for steadier growth prospects.
3. Digital Realty Trust (Ticker: DLR)
- Why? With the world becoming more data-centric, Digital Realty Trust focuses on data centre properties. Its portfolio supports the growing need for digital infrastructure, which promises both recurring revenue and long-term growth opportunities.
4. Simon Property Group (Ticker: SPG)
- Why? Simon Property Group owns and operates premier shopping and outlet centres as one of the largest and most recognisable retail REITs. Recovery in consumer spending and strategic portfolio management have helped it remain a strong candidate for dividend-driven growth.
5. AvalonBay Communities (Ticker: AVB) or Equity Residential (Ticker: EQR)
- Why? AvalonBay and Equity Residential are key players in the residential REIT space, focusing on high-quality rental housing in urban markets. They offer exposure to the residential sector, which can be less volatile and benefit from demographic trends and housing shortages.
While each of these REITs has its strengths—whether it’s steady dividends from leasing retail spaces, growth from industrial properties, or diversification through tech-driven assets—your decision should also consider your overall investment strategy, risk tolerance and potential benefits from geographic diversification. Remember that these recommendations are representative examples based on current trends and insights from sources discussing “best REITs for 2025”. A thorough analysis of each REIT and consulting with a financial advisor familiar with both U.S. and Indonesian market dynamics is always a wise step.
Discipline, Risk Management, and Contrarian Investing in REITs
When investing in REITs, adopting contrarian strategies can yield significant long-term benefits if done with discipline and effective risk management:
Disciplined Approach:
Look beyond market hype; being disciplined is essential for investing in REITs.Even when spotting an underpriced REIT, ensure you define and adhere to clear entry and exit criteria. This includes determining exactly how much capital you’re willing to risk and setting up triggering points for stop-losses or trailing stops that accommodate normal price fluctuations.
Risk Management Essentials:
Position sizing, diversification, and liquidity reserves should be fundamental to your plan. Allocate a portion of capital for opportunistic investments in undervalued REITs while keeping your core long-term holdings secure. Evaluate each REIT’s dividend sustainability by analyzing underlying lease agreements, operating costs, and cash flow coverage to avoid unexpected cuts during market downturns.
Emotional Regulation and Rational Analysis:
Stay clear of market panic. Instead of reacting impulsively, pre-plan your responses to market volatility. This rational approach will help you maintain focus on long-term value, especially when REITs with solid fundamentals are trading at discounted values during market distress.
Empowerment Through Contrarian Vision
Building a resilient investment strategy means breaking free from herd mentality:
Buy Low, Hold for the Long-Term:
The best REITs often shine during market turbulence. Their tangible, income-generating properties ensure that, despite short-term declines, asset values are likely to recover over time. A contrarian stance can secure consumer confidence and long-term gains when most investors capitulate.
Strategic and Informed Decisions:
You transform market fear into opportunities by marrying thorough research with rational discipline. This mindset applies to REIT investments and enhances overall financial decision-making, allowing you to act decisively during volatility and capitalize on undervalued assets.
Long-Term Vision:
Persistent contrarian courage and an unwavering focus on fundamentals can produce exceptional rewards. Embrace market cycles—view downturns as chances to strategically buy premium REITs at discount prices, knowing that solid property fundamentals will eventually drive recovery and continued dividend payments.
Final Thoughts
By integrating disciplined risk management with a contrarian investment strategy, you position yourself to identify the best REITs to hold through market cycles. Focus on assets that have proven resilience and sustainable income streams. This approach preserves your capital during tumultuous times and maximizes the potential for growth as the market normalizes. Remember, the key is to remain rational, patient, and persistent in your long-term vision. Happy investing!
